Henderson Land Development, owned by one of Hong Kong’s wealthiest families, revealed it holds majority stakes in 51 projects to redevelop old tenement buildings in the city as it reported better-than-expected underlying profit.

Excluding revaluation gains on investment properties, underlying profit jumped 38 per cent to HK$19.55 billion in the year to December, the company said in a filing to the Hong Kong stock exchange on Wednesday.

That was higher than the HK$14.2 billion average estimate of 21 analysts polled by Bloomberg.

The developer said turnover dipped 4.1 per cent from 2016 to HK$24.45 billion. It proposed issuing a bonus of one share for every 10 shares on top of a final dividend of HK$1.23 per share.

It said the 51 old residential buildings, acquired at a cost of HK$34.6 billion or HK$8,200 per sq ft, could be redeveloped to yield a total gross floor area of 4.2 million square feet. Henderson Land has secured more than 80 per cent ownership in the buildings, which are in areas including Sheung Wan, Mid-Levels and Jordan.

“The group has made use of multiple channels to expand its development land bank in Hong Kong,” said chairman Lee Shau-kee in the company statement.

Henderson has been aggressive in land banking in the past 12 months

Praveen Choudhary, equity analyst, Morgan Stanley

The buildings were acquired for about 45 per cent less than the HK$16 billion, or HK$15,000 per sq ft, Henderson Land paid for two residential sites in Kai Tak from HNA last month.

Including a HK$9.91 billion revaluation gain on investment properties, the company’s net profit increased 39 per cent to HK$30.4 billion.

“Henderson has been aggressive in land banking in the past 12 months,” said Praveen Choudhary, an equity analyst at Morgan Stanley, in a report which estimated the company has spent HK$3.7 billion on farmland conversion in addition to the Kai Tak sites.

“The company’s balance should remain manageable with net debt below 20 per cent after the acquisition,” said the report.

Henderson Land said it planned to build a 35-storey grade-A office development on the Murray Road car park in Central it won for a record HK$23.28 billion in a government tender last May. The project is expected to be completed in 2022.

“It is poised to feature as another iconic landmark in the central business district akin to the International Financial Centre,” the company said.

Henderson Land said it plans to release six development projects in this financial year.

“Together with unsold stocks, a total of about 3,300 residential units and 270,000 square feet of quality industrial or office space in Hong Kong will be available for sale in 2018,” said Lee in the company statement. That compares with 2,600 units released for sale in 2016.

Its subsidiary Henderson Investment reported net profit rose 11 per cent to HK$111 million last year, mainly because of a net gain of HK$33 million arising from the completion of wind-up proceedings for a discontinued infrastructure operation in the mainland. Turnover dipped 4.24 per cent to HK$834 million last year. Henderson Investment said it will issue a dividend of 2 HK cents.